Announcement of World Bank and IDA lend Eleven Million Dollars for Electric Power in Honduras on June 17, 1970

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT IN'I,ERNATIONAL DEVELOPMF~NT ASSOCIATION l 8 l 8 H STREET, N W WASHINGTON D.C.20433 TELEPHONE: EXECUTIVE 3-6360 Bank Presa Release No. 70/42 Subject: World Bank and IDA lend $11 mil- IDA Press Release No. 70/36 lion for electric power in June 17, 1970 Honduras The World Bank and its affiliate, the International Development Association (IDA), are lending $11 million to Honduras for a project which will extend the power system of Empresa Nacional de Energia Electrica (ENEE), the main supplier of electricity in the country, to areas of growing industrial and agricultural importance. ENEE's interconnected system presently serves a narrow central strip in- cluding the capital city of Tegucigalpa; the industrial center of San Pedro Sula • in the north; and Puerto Cortes, the largest seaport in the country, on the Caribbean coast. Under the project, this system will be extended by about 460 miles of transmission and subtransmission lines to important northern and southern towns. Among the new areas to be served are Tela, the third most important port in Honduras; La Ceiba, another port and the largest town on the north coast; the agriculturally rich Aguan and Sula Valleys; and the southern zone, another region of good development potential. The system will be linked to the 40-MW Rio Lindo hydroelectric scheme, which has re- ceived Bank Group financial assistance totaling $11.5 million, and which is expected to be commissioned by the end of 1970. Including the project, Bank Group lending for development of the power sector of Honduras will now total $32. 7 million. /more •  B1nk P.R. No. 70/42 - Honduras--Power IDA P.R. No. 70/36 adequate back-up power source. - 2 - Aiso, Ul1der the project, Tei~ucigalpa will have a gas turbine plant as an Feasibility studies of future hydroelectric • power projects and a power tariff study will be undertaken by consultants, and a training program for ENEE's staff will be initiated. The project is scheduled for completion by the end of 1973 at a total cost estimated at $14.8 million equivalent, of which $11 million will be fin~nced by the Bank loan and the IDA credit, each amounting to $5.5 million, and the remainder by ENEE. The Bank loan will be for a term of 20 years, including 4 years of grace, with interest at 7%. The IDA credit will be for a term of 50 years, including 10 years of grace, interest-free, with a service charge of 3/4 of 1% to cover • IDA's administrative costs. Both will be extended to the Republic of Honduras, which will relend their proceeds to ENEE for a term of 20 years, including 4 years of grace, at 7%. - 0 - •